Amazon (AMZN) is shaking off a disappointing third-quarter earnings report -- its first quarterly loss since 2003 -- and looking to the all-important holiday shopping season.

The online retailer on Thursday reported a net loss of $274 million, or 60 cents per share, down from a profit of $63 million, or 14 cents per share, a year earlier. Analysts had expected a loss of about 7 cents per share.

On Thursday, closed down $5.57, or 2.44%, to $222.92. In premarket trading Friday, shares were up 2% to $227.50.

Third-quarter figures, according to the company's earnings statement, also included a loss of $169 million, or 37 cents a share, related to Amazon's investment in LivingSocial.com, the discount website.

But LivingSocial CEO Tim O'Shaughnessy reportedly has told employees to take anything they hear with a grain of salt. "You're likely to see news articles saying that we hurt Amazon's earnings and lost a ton of money," AllThingsD reported he said in a company memo. "That doesn't tell the full story."

Amazon's sales for the quarter, meanwhile, increased 27% to $13.81 billion, up from $10.88 billion in the third quarter of 2011.

"Our approach is to work hard to charge less," said Amazon founder and CEO Jeff Bezos. "Sell devices near breakeven, and you can pack a lot of sophisticated hardware into a very low price point."

Amazon is also betting its recent multibillion-dollar investment in distribution centers across the country will increase its market share and cut shipping times, with the goal of next-day delivery, The New York Times reported. But all that investment has chipped away at the company's already thin profit margins.

And Amazon is under growing pressure from state governments to charge sales tax, which would further erode its price advantage over brick-and-mortar competitors like Best Buy (BBY), Wal-Mart (WMT) and Target (TGT).

But Bezos said his company's approach is working, and he points to its line of Kindle e-readers.

"The $199 Kindle Fire HD is the No. 1 bestselling product across Amazon worldwide," he said. "Incredibly, this is true even as measured by unit sales. The next two bestselling products worldwide are our Kindle Paperwhite and our $69 Kindle. We're selling more of each of these devices than the No. 4 bestselling product, book three of the 'Fifty Shades of Grey' series. And we haven't even started shipping our best tablet." The $299 version of the Kindle Fire HD ships Nov. 20.

The company noted its North American sales were up 33% compared with the third quarter of 2011, to $7.88 billion.

Amazon also said its fourth-quarter 2012 sales are expected to be between $20.25 billion and $22.75 billion -- well up from its 2011 fourth-quarter figures -- with profit of somewhere between $310 million and $490 million.

Amazon CFO Tom Szkutak did temper those expectations a bit during the post-earnings conference call. "Our results are inherently unpredictable," he said, "and may be materially affected by factors including a high level of uncertainty surrounding exchange rate fluctuations, as well as the global economy and consumer spending."

But there are reasons for optimism: Amazon is gearing up for the holiday shopping rush by hiring more than 50,000 people for seasonal positions to store, pack, ship and provide customer service at its U.S. fulfillment centers. Amazon also plans to open 19 fulfillment centers worldwide to support this year's holiday demand.

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